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Leases | 6 Months Ended
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Jun. 30, 2026
Leases [Abstract] |
Leases | Leases The Company leases real estate, vehicles and other equipment under operating lease arrangements. There have been no material changes to the Company’s lease accounting policies from those disclosed in its Annual Report on Form 10-K for the year ended December 31, 2025. Southern California Sublease. The Company subleases substantially all of its Southern California leased office space through April 30, 2027. The Company remains obligated under the related master lease and would be required to satisfy its obligations to the landlord in the event of a sublessee default. Sublease income recognized in selling, general and administrative expense was approximately $0.3 million and $0.6 million for the three and six months ended June 30, 2026 and 2025, respectively. The following table summarizes the lease amounts included in the Company’s condensed consolidated balance sheets:
(in thousands) | Classification on the Condensed Consolidated Balance Sheets |  | June 30, 2026 |  | December 31, 2025
Assets |  |  |  |  |
Operating | Operating lease right-of-use assets(1)(2) |  | $ | 18,220 |  |  | $ | 19,792 |
Finance | Property and equipment, net(3)(4) |  | 19,259 |  |  | 22,002 |
Total lease assets |  |  | $ | 37,479 |  |  | $ | 41,794 |
Liabilities |  |  |  |  |
Current |  |  |  |  |
Operating | Current operating lease liabilities |  | $ | 4,592 |  |  | $ | 4,379 |
Finance | Current portion of long-term debt |  | 4,862 |  |  | 5,031 |
Noncurrent |  |  |  |  |
Operating | Long-term operating lease liabilities |  | 14,290 |  |  | 15,925 |
Finance | Long-term debt(5) |  | 18,688 |  |  | 20,890 |
Total lease liabilities |  |  | $ | 42,432 |  |  | $ | 46,225 |
(1) Operating lease assets are recorded net of accumulated amortization of $20.1 million at June 30, 2026 and $17.9 million at December 31, 2025. (2) Includes approximately $0.7 million and $0.8 million at June 30, 2026 and December 31, 2025, respectively, related to a below-market lease recognized as a result of the Industrial Air acquisition, which was recorded as an increase to the Company’s operating lease right-of-use assets on its condensed consolidated balance sheet. The below-market lease will be amortized to amortization expense over the remaining lease term. (3) Finance lease vehicle assets are recorded net of accumulated amortization of $9.5 million at June 30, 2026 and $8.2 million at December 31, 2025. (4) Includes approximately $2.2 million of net property assets associated with the Company’s Pontiac Facility at both June 30, 2026 and December 31, 2025. (5) Includes approximately $5.4 million associated with the Company’s sale and leaseback financing transaction at both June 30, 2026 and December 31, 2025. See Note 6 – Debt for further detail. The following table summarizes the lease costs included in the Company’s condensed consolidated statements of operations for the three and six months ended June 30, 2026 and 2025:
|  |  | Three Months Ended June 30, |  | Six Months Ended June 30,
(in thousands) | Classification on the Condensed Consolidated Statement of Operations |  | 2026 |  | 2025 |  | 2026 |  | 2025
Operating lease cost | Cost of revenue(1) |  | $ | 813 |  |  | $ | 911 |  |  | $ | 1,613 |  |  | $ | 1,769 |
Operating lease cost | Selling, general and administrative(1) |  | 603 |  |  | 419 |  |  | 1,204 |  |  | 866 |
Finance lease cost |  |  |  |  |  |  |  |  |
Amortization | Cost of revenue(2) |  | 1,387 |  |  | 1,042 |  |  | 2,811 |  |  | 1,971 |
Interest | Interest expense, net(2) |  | 246 |  |  | 196 |  |  | 507 |  |  | 372 |
Total lease cost |  |  | $ | 3,049 |  |  | $ | 2,568 |  |  | $ | 6,135 |  |  | $ | 4,978 |
(1) Operating lease costs recorded in cost of revenue included $0.2 million of variable lease costs for both the three months ended June 30, 2026 and 2025, respectively, and $0.3 million for both the six months ended June 30, 2026 and 2025, respectively. In addition, $0.1 million of variable lease costs are included in selling, general and administrative for both the three months ended June 30, 2026 and 2025, and $0.2 million for both the six months ended June 30, 2026 and 2025. These variable costs consist of the Company’s proportionate share of operating expenses, real estate taxes and utilities. (2) Finance lease costs recorded in cost of revenue includes variable lease costs of $1.2 million and $0.8 million for the three months ended June 30, 2026 and 2025, respectively, and $2.0 million and $1.9 million for the six months ended June 30, 2026 and 2025, respectively. These variable lease costs consist of fuel, maintenance, and sales tax charges. The future undiscounted minimum finance lease payments, as reconciled to the discounted minimum lease obligation indicated on the Company’s condensed consolidated balance sheets within current and long-term debt, less interest, and under current and long-term operating leases, less imputed interest, as of June 30, 2026 were as follows (in thousands):
Year ending: |  | Vehicles |  | Pontiac Facility |  | Total Finance Lease Obligations |  |  |  |  |  | Operating Lease Obligations |  | Sublease Receipts(1)
Remainder of 2026 |  | $ | 2,893 |  |  | $ | 272 |  |  | $ | 3,165 |  |  |  |  |  |  | $ | 2,853 |  |  | $ | 572 |
2027 |  | 5,209 |  |  | 555 |  |  | 5,764 |  |  |  |  |  |  | 5,051 |  |  | 495 |
2028 |  | 4,529 |  |  | 569 |  |  | 5,098 |  |  |  |  |  |  | 4,233 |  |  | 14 |
2029 |  | 4,697 |  |  | 583 |  |  | 5,280 |  |  |  |  |  |  | 3,537 |  |  | — |
2030 |  | 2,715 |  |  | 597 |  |  | 3,312 |  |  |  |  |  |  | 2,255 |  |  | — |
Thereafter |  | 50 |  |  | 12,552 |  |  | 12,602 |  |  |  |  |  |  | 3,985 |  |  | — |
Total minimum lease payments |  | 20,093 |  |  | 15,128 |  |  | 35,221 |  |  |  |  |  |  | 21,914 |  |  | $ | 1,081 |
Financing Component (2) |  | (1,894) |  |  | (9,777) |  |  | (11,671) |  |  |  |  |  |  | (3,032) |  |  |
Net present value of minimum lease payments |  | 18,199 |  |  | 5,351 |  |  | 23,550 |  |  |  |  |  |  | 18,882 |  |  |
Less: current portion of finance and operating lease obligations |  | (4,862) |  |  | — |  |  | (4,862) |  |  |  |  |  |  | (4,592) |  |  |
Long-term finance and operating lease obligations |  | $ | 13,337 |  |  | $ | 5,351 |  |  | $ | 18,688 |  |  |  |  |  |  | $ | 14,290 |  |  |
(1) Primarily associated with the aforementioned third-party sublease agreement. (2) The financing component for finance lease obligations represents the interest component of finance leases that will be recognized as interest expense in future periods. The financing component for operating lease obligations represents the effect of discounting the lease payments to their present value. The following is a summary of the lease terms and discount rates as of:
| June 30, 2026 |  | December 31, 2025
Weighted average lease term (in years): |  |  |
Operating | 5.12 |  | 5.43
Finance (1) | 3.57 |  | 3.95
Weighted average discount rate: |  |  |
Operating | 6.19 | % |  | 6.18 | %
Finance (1) | 5.36 | % |  | 5.41 | %
(1) Excludes the weighted average lease term and weighted average discount rate associated with the aforementioned sale-leaseback financing transaction, which has a Primary Term of 25 years and utilized an implicit rate of 11.11%. See Note 6 – Debt for further detail. The following is a summary of other information and supplemental cash flow information related to finance and operating leases:
|  | Six Months Ended June 30,
(in thousands) |  | 2026 |  | 2025
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |
Operating cash flows from operating leases |  | $ | 2,723 |  |  | $ | 2,611 |
Operating cash flows from finance leases |  | 450 |  |  | 345 |
Financing cash flows from finance leases |  | 2,501 |  |  | 1,767 |
Right-of-use assets exchanged for lease liabilities: |  |  |  |
Operating leases |  | 710 |  |  | 1,676 |
Finance leases |  | 177 |  |  | 7,933 |
Right-of-use assets disposed or adjusted modifying finance leases liabilities |  | 20 |  |  | — |
Leases | Leases The Company leases real estate, vehicles and other equipment under operating lease arrangements. There have been no material changes to the Company’s lease accounting policies from those disclosed in its Annual Report on Form 10-K for the year ended December 31, 2025. Southern California Sublease. The Company subleases substantially all of its Southern California leased office space through April 30, 2027. The Company remains obligated under the related master lease and would be required to satisfy its obligations to the landlord in the event of a sublessee default. Sublease income recognized in selling, general and administrative expense was approximately $0.3 million and $0.6 million for the three and six months ended June 30, 2026 and 2025, respectively. The following table summarizes the lease amounts included in the Company’s condensed consolidated balance sheets:
(in thousands) | Classification on the Condensed Consolidated Balance Sheets |  | June 30, 2026 |  | December 31, 2025
Assets |  |  |  |  |
Operating | Operating lease right-of-use assets(1)(2) |  | $ | 18,220 |  |  | $ | 19,792 |
Finance | Property and equipment, net(3)(4) |  | 19,259 |  |  | 22,002 |
Total lease assets |  |  | $ | 37,479 |  |  | $ | 41,794 |
Liabilities |  |  |  |  |
Current |  |  |  |  |
Operating | Current operating lease liabilities |  | $ | 4,592 |  |  | $ | 4,379 |
Finance | Current portion of long-term debt |  | 4,862 |  |  | 5,031 |
Noncurrent |  |  |  |  |
Operating | Long-term operating lease liabilities |  | 14,290 |  |  | 15,925 |
Finance | Long-term debt(5) |  | 18,688 |  |  | 20,890 |
Total lease liabilities |  |  | $ | 42,432 |  |  | $ | 46,225 |
(1) Operating lease assets are recorded net of accumulated amortization of $20.1 million at June 30, 2026 and $17.9 million at December 31, 2025. (2) Includes approximately $0.7 million and $0.8 million at June 30, 2026 and December 31, 2025, respectively, related to a below-market lease recognized as a result of the Industrial Air acquisition, which was recorded as an increase to the Company’s operating lease right-of-use assets on its condensed consolidated balance sheet. The below-market lease will be amortized to amortization expense over the remaining lease term. (3) Finance lease vehicle assets are recorded net of accumulated amortization of $9.5 million at June 30, 2026 and $8.2 million at December 31, 2025. (4) Includes approximately $2.2 million of net property assets associated with the Company’s Pontiac Facility at both June 30, 2026 and December 31, 2025. (5) Includes approximately $5.4 million associated with the Company’s sale and leaseback financing transaction at both June 30, 2026 and December 31, 2025. See Note 6 – Debt for further detail. The following table summarizes the lease costs included in the Company’s condensed consolidated statements of operations for the three and six months ended June 30, 2026 and 2025:
|  |  | Three Months Ended June 30, |  | Six Months Ended June 30,
(in thousands) | Classification on the Condensed Consolidated Statement of Operations |  | 2026 |  | 2025 |  | 2026 |  | 2025
Operating lease cost | Cost of revenue(1) |  | $ | 813 |  |  | $ | 911 |  |  | $ | 1,613 |  |  | $ | 1,769 |
Operating lease cost | Selling, general and administrative(1) |  | 603 |  |  | 419 |  |  | 1,204 |  |  | 866 |
Finance lease cost |  |  |  |  |  |  |  |  |
Amortization | Cost of revenue(2) |  | 1,387 |  |  | 1,042 |  |  | 2,811 |  |  | 1,971 |
Interest | Interest expense, net(2) |  | 246 |  |  | 196 |  |  | 507 |  |  | 372 |
Total lease cost |  |  | $ | 3,049 |  |  | $ | 2,568 |  |  | $ | 6,135 |  |  | $ | 4,978 |
(1) Operating lease costs recorded in cost of revenue included $0.2 million of variable lease costs for both the three months ended June 30, 2026 and 2025, respectively, and $0.3 million for both the six months ended June 30, 2026 and 2025, respectively. In addition, $0.1 million of variable lease costs are included in selling, general and administrative for both the three months ended June 30, 2026 and 2025, and $0.2 million for both the six months ended June 30, 2026 and 2025. These variable costs consist of the Company’s proportionate share of operating expenses, real estate taxes and utilities. (2) Finance lease costs recorded in cost of revenue includes variable lease costs of $1.2 million and $0.8 million for the three months ended June 30, 2026 and 2025, respectively, and $2.0 million and $1.9 million for the six months ended June 30, 2026 and 2025, respectively. These variable lease costs consist of fuel, maintenance, and sales tax charges. The future undiscounted minimum finance lease payments, as reconciled to the discounted minimum lease obligation indicated on the Company’s condensed consolidated balance sheets within current and long-term debt, less interest, and under current and long-term operating leases, less imputed interest, as of June 30, 2026 were as follows (in thousands):
Year ending: |  | Vehicles |  | Pontiac Facility |  | Total Finance Lease Obligations |  |  |  |  |  | Operating Lease Obligations |  | Sublease Receipts(1)
Remainder of 2026 |  | $ | 2,893 |  |  | $ | 272 |  |  | $ | 3,165 |  |  |  |  |  |  | $ | 2,853 |  |  | $ | 572 |
2027 |  | 5,209 |  |  | 555 |  |  | 5,764 |  |  |  |  |  |  | 5,051 |  |  | 495 |
2028 |  | 4,529 |  |  | 569 |  |  | 5,098 |  |  |  |  |  |  | 4,233 |  |  | 14 |
2029 |  | 4,697 |  |  | 583 |  |  | 5,280 |  |  |  |  |  |  | 3,537 |  |  | — |
2030 |  | 2,715 |  |  | 597 |  |  | 3,312 |  |  |  |  |  |  | 2,255 |  |  | — |
Thereafter |  | 50 |  |  | 12,552 |  |  | 12,602 |  |  |  |  |  |  | 3,985 |  |  | — |
Total minimum lease payments |  | 20,093 |  |  | 15,128 |  |  | 35,221 |  |  |  |  |  |  | 21,914 |  |  | $ | 1,081 |
Financing Component (2) |  | (1,894) |  |  | (9,777) |  |  | (11,671) |  |  |  |  |  |  | (3,032) |  |  |
Net present value of minimum lease payments |  | 18,199 |  |  | 5,351 |  |  | 23,550 |  |  |  |  |  |  | 18,882 |  |  |
Less: current portion of finance and operating lease obligations |  | (4,862) |  |  | — |  |  | (4,862) |  |  |  |  |  |  | (4,592) |  |  |
Long-term finance and operating lease obligations |  | $ | 13,337 |  |  | $ | 5,351 |  |  | $ | 18,688 |  |  |  |  |  |  | $ | 14,290 |  |  |
(1) Primarily associated with the aforementioned third-party sublease agreement. (2) The financing component for finance lease obligations represents the interest component of finance leases that will be recognized as interest expense in future periods. The financing component for operating lease obligations represents the effect of discounting the lease payments to their present value. The following is a summary of the lease terms and discount rates as of:
| June 30, 2026 |  | December 31, 2025
Weighted average lease term (in years): |  |  |
Operating | 5.12 |  | 5.43
Finance (1) | 3.57 |  | 3.95
Weighted average discount rate: |  |  |
Operating | 6.19 | % |  | 6.18 | %
Finance (1) | 5.36 | % |  | 5.41 | %
(1) Excludes the weighted average lease term and weighted average discount rate associated with the aforementioned sale-leaseback financing transaction, which has a Primary Term of 25 years and utilized an implicit rate of 11.11%. See Note 6 – Debt for further detail. The following is a summary of other information and supplemental cash flow information related to finance and operating leases:
|  | Six Months Ended June 30,
(in thousands) |  | 2026 |  | 2025
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |
Operating cash flows from operating leases |  | $ | 2,723 |  |  | $ | 2,611 |
Operating cash flows from finance leases |  | 450 |  |  | 345 |
Financing cash flows from finance leases |  | 2,501 |  |  | 1,767 |
Right-of-use assets exchanged for lease liabilities: |  |  |  |
Operating leases |  | 710 |  |  | 1,676 |
Finance leases |  | 177 |  |  | 7,933 |
Right-of-use assets disposed or adjusted modifying finance leases liabilities |  | 20 |  |  | — |

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